ISSUE NO.

4 | 23RD SEPTEMBER 2021

WHAT'S MY VIEW
Official publication of BLASH, IIFT DELHI

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Temporary Trade Barriers

(TTB) What's happening at
BLASH IIFT Delhi ?

WRITTEN BY OMKAR KUMBHAR

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After taking control of Afghanistan’s capital Kabul, Taliban stopped
all the imports and exports with India. The news erupted on 18th
August 2021 and trade merchants involved in this annual $1.5
Billion industry went into a shock, worried about future
uncertainties. Dry fruits industry in India faced supply shortage and
subsequent major price hikes. Be it an enforced decision of a party
or a natural calamity stopping the movement, all such motions are
termed as ‘Temporary Trade Barriers (TTB)’.

Such kind of barriers often arise due to circumstantial

scenarios and exist for a short period of time until the
respective parties work together to find a solution.
Worldwide spread of Covid’19 pandemic and
subsequent lockdowns resulted in halting the trades
between the countries.

Even though European countries got the situation under control and recovered from the disruptions, they
chose to continue the trade restrictions with pandemic hit countries like India and Brazil considering the
potential re-emergence of the pandemic. Other than unfortunate natural calamities, some barriers may arise
from human activities too. The world witnessed such a temporary problem when a 400m long massive
container ship ‘Ever Given’ blocked the Suez Canal which acts as a channel for 12% of the global trade. This
dried up a daily revenue by $14 Mn - &15 Mn of the Suez Canal Authority and halted the $9 Bn worth trade
happening through the canal each day.
 ISSUE NO. 4 | 23RD SEPTEMBER 2021

Such kind of disruptions cause great amount of stress in the trade and overall supply chain of the goods. The
period for which the trade is partially or completely halted is usually less than a year. Either the situation
normalizes or alternative channels are eventually found out and employed.
But some TTBs are enforced even by the governments! Most of the times, governments increase tariff rates
for particular imported products to safeguard domestic products from international companies. These include
anti-dumping measures and countervailing duties. Usually large countries like The United States, European
Union or China enforce TTBs and don’t face any retaliations from other countries. But countries like India and
Argentina have faced strong retaliations whenever they tried to take cover of TTBs. World Trade Organization
(WTO) provides protection to countries which take retaliatory measures through TTBs against mal-practices
by partner countries in terms of dumping excess goods to make the local manufacturers incompetent on price
and supply. Such events and investigations are recorded in Temporary Trade Barrier Database (TTBD).

Distribution of Temporary Trade Barriers globally during 2019 (main highlight: trade conflicts with USA)

In countries like USA where lobbyists have an influence on the Government’s actions, one can always push
for initiating talks with partner countries to avoid potential loss. For the companies to be ready for any such
enforcement of TTBs which may disrupt the trade for 2-3 months or even more, the best practice is to
diversify the trade partners to be more resilient.

Omkar Kumbhar is currently a

is a student of IIFT Delhi of the
batch of 2021-23